delivered the opinion of the Court.
Under § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1, “[e]very contract, combination..., or conspiracy, in restraint of trade” is illegal. In
Albrecht
v.
Herald Co.,
Respondents, Barkat U. Khan and his corporation, entered into an agreement with petitioner, State Oil Company, to lease and operate a gas station and convenience store owned *8 by State Oil. The agreement provided that respondents would obtain the station’s gasoline supply from State Oil at a price equal to a suggested retail price set by State Oil, less a margin of B.25 cents per gallon. ' 'Under the agreement, respondents could charge any amount for gasoline sold to the station’s customers, but if the price charged was higher than > State Oil’s suggested retail price, the excess was to be rebated to State Oil. Respondents could sell gasoline for less than State Oil’s suggested retail price, but any such decrease would reduce their 3.25 cents-per-gallon margin.
About a year after respondents began operating the gas station, they fell behind in lease payments. State Oil then gave notice of its intent to terminate the agreement and commenced a state court proceeding to evict respondents. At State Oil’s request, the state court appointed a receiver to operate the gas station. The receiver operated the station for several months without being subject to the price restraints in respondents’ agreement with State Oil. According to respondents, the receiver obtained an overall profit margin in excess of 3.25 cents per gallon by lowering the price of regular-grade gasoline and raising the price of premium grades.
Respondents sued State Oil in the United States District Court for the Northern District of Illinois, alleging in part that State Oil had engaged in price fixing in violation of § 1 of the Sherman Act by preventing respondents from raising or lowering retail gas prices. According to the complaint, but for the agreement with State Oil, respondents could have charged different prices based on the grades of gasoline, in the same way that the receiver had, thereby achieving increased sales and profits. State Oil responded that the agreement did not actually prevent respondents from setting gasoline prices, and that, in substance, respondents did not allege a violation of antitrust laws by their claim that State Oil’s suggested retail price was not optimal.
*9 The District Court found that the allegations in the complaint did not state a per se violation of the Sherman Act because they did not establish the sort of “manifestly anti-competitive implications or pernicious effect on competition” that would justify per se prohibition of State Oil’s conduct. App. 43-44. Subsequently, in ruling on cross-motions for summary judgment, the District Court concluded that respondents had failed to demonstrate antitrust injury or harm to competition. App. to Pet. for Cert. 37a. The District Court held that respondents had not shown that a difference in gasoline pricing would have increased the station’s sales; nor had they shown that State Oil had market power or that its pricing provisions affected competition in a relevant market. Id., at 37a, 40a. Accordingly, the District Court entered summary judgment for State Oil on respondents’ Sherman Act claim. Id., at 40a.
The Court of Appeals for the Seventh Circuit reversed.
We granted certiorari to consider two questions, whether State Oil’s conduct constitutes a
per se
violation of the Sherman Act and whether respondents are entitled to recover damages based on that conduct.
*10 II
A
Although the Sherman Act, by its terms, prohibits every agreement “in restraint of trade,” this Court has long recognized that Congress intended to outlaw only unreasonable restraints. See,
e. g., Arizona
v.
Maricopa County Medical Soc.,
Some types of restraints, however, have such predictable and pernicious anticompetitive effect, and such limited potential for proeompetitive benefit, that they are deemed unlawful
per se. Northern Pacific R. Co.
v.
United States,
A review of this Court’s decisions leading up to and beyond
Albrecht
is relevant to our assessment of the continuing validity
of
the
per se
rule established in
Albrecht.
Beginning
*11
with
Dr. Miles Medical Co.
v.
John D. Park & Sons Co.,
In subsequent cases, the Court’s attention turned to arrangements through which suppliers imposed restrictions on dealers with respect to matters other than resale price. In
White Motor Co.
v.
United States,
Albrecht,
decided the following Term, involved a newspaper publisher who had granted exclusive territories to independent carriers subject to their adherence to a maximum price on resale of the newspapers to the public. Influenced by its decisions in
Socony-Vacuum, Kiefer-Stewart,
and
Schwinn,
the Court concluded that it was
per se
unlawful for the publisher to fix the maximum resale price of its newspapers.
Albrecht was animated in part by the fear that vertical maximum price fixing could allow suppliers to discriminate against certain dealers, restrict the services that dealers could afford to offer customers, or disguise minimum price fixing schemes. Id., at 152-153. The Court rejected the notion (both on the record of that case and in the abstract) that, because the newspaper publisher “granted exclusive territories, a price ceiling was necessary to protect the public from price gouging by dealers who had monopoly power in their own territories.” Id., at 153.
In a vigorous dissent, Justice Harlan asserted that the majority had erred in equating the effects of maximum and minimum price fixing. Id., at 156-168. Justice Harlan pointed out that, because the majority was establishing a per se rule, the proper inquiry was “not whether dictation of maximum prices is ever illegal, but whether it is always illegal.” Id., at 165-166. He also faulted the majority for conclusively listing “certain unfortunate consequences that maximum *13 price dictation might have in other cases,” even as it rejected evidence that the publisher’s practice of fixing maximum prices counteracted potentially anticompetitive actions by its distributors. Id., at 165. Justice Stewart also dissented, asserting that the publisher’s maximum price fixing scheme should be properly viewed as promoting competition, because it protected consumers from dealers such as Albrecht, who, as “the only person who could sell for home delivery the city’s only daily morning newspaper,” was “a monopolist within his own territory.” Id., at 168.
Nine years later, in
Continental T. V., Inc.
v.
GTE Sylvania Inc.,
“Sineé its announcement, Schwinn has been the subject of continuing controversy and confusion, both in the scholarly journals and in the federal courts. The great weight of scholarly opinion has been critical of the decision, and a number of the federal courts confronted with analogous vertical restrictions have sought to limit its reach. In our view, the experience of the past 10 years should be brought to bear on this subject of considerable commercial importance.”433 U. S., at 47-49 (footnotes omitted).
The Court considered the historical context of
Schwinn,
noting that
Schwinn’s per se
rule against vertical nonpriee restrictions came only four years after the Court had refused to endorse a similar rule in
White Motor Co.,
and that the decision neither explained the “sudden change in position,” nor referred to the accepted requirements for
per se
violations set forth in
Northern Pacific R. Co.
In
GTE Sylvania,
the Court declined to comment on
Albrechts per se
treatment of vertical maximum price restrictions, noting that the issue “involve[d] significantly different questions of analysis and policy.”
Most recently, in
ARCO,
B
Thus, our reconsideration of
Albrecht’s
continuing validity is informed by several of our decisions, as well as a considerable body of scholarship discussing the effects of vertical restraints. Our analysis is also guided by our general view that the primary purpose of the antitrust laws is to protect interbrand competition. See,
e. g., Business Electronics Corp.
v.
Sharp Electronics Corp.,
So informed, we find it difficult to maintain that vertically imposed maximum prices could harm consumers or competition to the extent necessary to justify their per se invalidation. As Chief Judge Posner wrote for the Court of Appeals in this ease:
“As for maximum resale price fixing, unless the supplier is a monopsonist he cannot squeeze his dealers’ margins *16 below a competitive level; the attempt to do so would just drive the dealers into the arms of a competing supplier. A supplier might, however, fix a maximum resale price in order to prevent his dealers from exploiting a monopoly position.... [Sjuppose that State Oil, perhaps to encourage ... dealer services ... has spaced its dealers sufficiently far apart to limit competition among them (or even given each of them an exclusive territory); and suppose further that Union 76 is a sufficiently distinctive and popular brand to give the dealers in it at least a modicum of monopoly power. Then State Oil might want to place a ceiling on the dealers’ resale prices in order to prevent them from exploiting that monopoly power folly. It would do this not out of disinterested malice, but in its commercial self-interest. The higher the price at which gasoline is resold, the smaller the volume sold, and so the lower the profit to the supplier if the higher profit per gallon at the higher price is being snared by the dealer.”93 F. 3d, at 1362 .
See also R. Bork, The Antitrust Paradox 281-282 (1978) (“There could, of course, be no anticonsumer effect from [the type of price fixing considered in Albrecht], and one suspects that the paper has a legitimate interest in keeping subscriber prices down in order to increase circulation and maximize revenues from advertising”).
We recognize that the
Albrecht
decision presented a number of theoretical justifications for a
per se
rule against vertical maximum price fixing. But criticism of those premises abounds. The
Albrecht
decision was grounded in the fear that maximum price fixing by suppliers could interfere with dealer freedom.
The
Albrecht
Court also expressed the concern that maximum prices may be set too low for dealers to offer consumers essential or desired services.
Finally,
Albrecht
reflected the Court’s fear that maximum price fixing could be used to disguise arrangements to fix minimum prices,
Not only are the potential injuries cited in
Albrecht
less serious than the Court imagined, the
per se
rule established therein could in fact exacerbate problems related to the unrestrained exercise of market power by monopolist-dealers. Indeed, both courts and antitrust scholars have noted that
Albrecht’s
rule may actually harm consumers and manufacturers. See,
e. g., Caribe BMW, Inc.
v.
Bayerische Motoren Werke Aktiengesellschaft,
After reconsidering
Albrecht’s
rationale and the substantial criticism the decision has received, however, we conclude that there is insufficient economic justification for per
se
invalidation of vertical maximum price fixing. That is so not only because it is difficult to accept the assumptions underlying
Albrecht,
but also because
Albrecht
has little or no relevance to ongoing enforcement of the Sherman Act. See
Copperweld Corp.
v.
Independence Tube Corp.,
Respondents argue that reconsideration of Albrecht should require “persuasive, expert testimony establishing that the per se rule has distorted the market.” Brief for Respondents 7. Their reasoning ignores the fact that Albrecht itself relied solely upon hypothetical effects of vertical maximum price fixing. Further, Albrecht’s, dire predictions have not been borne out, even though manufacturers and suppliers appear to have fashioned schemes to get around the per se rule against vertical maximum price fixing. In these circumstances, it is the retention of the rule of Albrecht, and not, as respondents would have it, the rule’s elimination, that lacks adequate justification. See, e. g., GTE Sylvania, supra, at 58-59.
Respondents’ reliance on
Toolson
v.
New York Yankees, Inc.,
*20 c
Despite what Chief Judge Posner aptly described as
Al-brechts
"infirmities, [and] its increasingly wobbly, moth-eaten foundations,”
We approach the reconsideration of decisions of this Court with the utmost caution.
Stare decisis
reflects “a policy judgment that fin most matters it is more important that the applicable rule of law be settled than that it be settled right.’”
Agostini
v.
Felton,
But
“[sjtare decisis
is not an inexorable command.”
Ibid.
In the area of antitrust law, there is a competing interest, well represented in this Court’s decisions, in recognizing and adapting to changed circumstances and the lessons of accumulated experience. Thus, the general presumption that legislative changes should be left to Congress has less force with respect to the Sherman Act in light of the accepted view that Congress “expected the courts to give shape to the statute’s broad mandate by drawing on common-law tra
*21
dition.”
National Soc. of Professional Engineers
v.
United States,
Although we do not “lightly assume that the economic realities underlying earlier decisions have changed, or that earlier judicial perceptions of those realities were in error,” we have noted that “different sorts of agreements” may amount to restraints of trade “in varying times and circumstances,” and “[i]t would make no sense to create out of the single term ‘restraint of trade’ a chronologically schizoid statute, in which a ‘rule of reason’ evolves with new circumstances and new wisdom, but a line of
per se
illegality remains forever fixed where it was.”
Business Electronics, supra,
at 731-732. Just as
Schwinn
was “the subject of continuing controversy and confusion” under the “great weight” of scholarly criticism,
GTE Sylvania, supra,
at 47-48,
Albrecht
has been widely criticized since its inception. With the views underlying
Albrecht
eroded by this Court’s precedent, there is not much of that decision to salvage. See,
e. g., Neal
v.
United States,
Although the rule of
Albrecht
has been in effect for some time, the inquiry we must undertake requires considering “ ‘the effect of the antitrust laws upon vertical distributional
*22
restraints in the American economy today.’”
GTE Sylvania, supra,
at 53, n. 21 (quoting
Schwinn,
In overruling Albrecht, we of course do not hold that all vertical maximum price fixing is per se lawful. Instead, vertical maximum priee fixing, like the majority of commercial arrangements subject-to the antitrust laws, should be evaluated under the rule of reason. In our view, rule-of-reason analysis will effectively identify those situations in which vertical maximum price fixing amounts to anticompetitive conduct.
There remains the question whether respondents are entitled to recover damages based on State Oil’s conduct. Although the Court of Appeals noted that “the district judge was right to conclude that if the rule of reason is applicable, Khan loses,”
It is so ordered.